A new political battle is brewing over Net music swapping, focusing on a company that claims to be able to automatically identify copyrighted songs on networks like Kazaa and to block illegal downloads.

Los Gatos, Calif.-based Audible Magic has been making the rounds of Washington, D.C., legislative and regulatory offices for the last month, showing off technology it says can sit inside peer-to-peer software and automatically stop swaps of copyrighted music from artists such as Britney Spears or Outkast.

News.context

What's new:
Legislators are hearing a pitch from the record industry about new technology that could squelch music file swapping.

Bottom line:
Audible Magic says it can identify copyrighted songs and block illegal downloads. Its technology is still being tested and could yet prove unworkable, but limited demos are turning heads in legislative offices.

The company's technology is still being tested and could yet prove unworkable. But limited demonstrations have already turned some heads in legislative offices.

"It is definitely something that is interesting to people on (Capitol) Hill," said one senior congressional staffer who had seen the demonstration and requested anonymity. "We are open to all kinds of different solutions at this point. Having the technological ability to do this certainly opens up some opportunities."

Audible Magic has predictably become a protege of the Recording Industry Association of America (RIAA), which has helped the company gain entree to official Washington circles. The group says Audible Magic's technology, or something like it, should be adopted by file-swapping companies if they are serious about not supporting widespread copyright infringement.

The RIAA's backing, and the month-long press tour, has given the technology new credibility in legislative, regulatory and university circles. After watching a demonstration at RIAA headquarters in late January, University of Rochester Provost Chuck Phelps said he instructed his technology staff to evaluate the technology for use on his campus.

The RIAA isn't pressing for legislation or enforced usage of Audible Magic's software, at least not yet. Indeed, in an election year, any serious congressional attention to the issue is unlikely. But peer-to-peer companies are keenly aware of the potential for political strong arming--and of the threat it poses to the world of file swapping.

Privacy advocates and file-swapping backers have been deeply critical of any technology that would enforce monitoring or blocking of file swapping or any other Internet service. They argue that filters could infringe on free speech and block technological innovation, all to serve the entertainment industry's relatively narrow interests.

Nevertheless, the vast popularity of file-swapping networks like Kazaa remains largely based on trades of copyrighted songs, videos and software, according to many Net analysts. Being forced to install song-stopping filters inside software such as Kazaa--much as a court required of Napster in its heyday?-could severely disrupt the ability of file swappers to freely trade songs.

In past months, peer-to-peer executives including Sharman Networks' Nikki Hemming have repeatedly told legislators that it was technically impossible or infeasible to install adequate filtering systems on their networks. Now some are switching focus, saying that even if filtering is technically possible, mandating it would be a disastrous mistake.

Requiring filters "would amount to the anointment of a specific technology as the winner in what the (recording) industry has made a file-sharing war," said Adam Eisgrau, executive director of P2P United, a file-swapping company trade association. "It is time that (the entertainment industry) be politely told that theirs is not the only social and economic interest at stake."

P2P United members have not seen Audible Magic's technology, Eisgrau noted. His group sent letters to RIAA Chief Executive Officer Mitch Bainwol and Audible Magic earlier in the week asking for a demonstration.

In an interview with CNET News.com, Bainwol said he would be delighted to do so: "The peer-to-peer community has said they are serious about filtering. But they've said they can't filter. We're saying, well, the good news is that you can."

From Napster's death to Audible Magic The idea of filtering file-swapping networks got its first test run in Napster's last days, when courts mandated that the company block trades of copyrighted songs with near-perfect accuracy. The company first tried to block key works, but that failed when users simply renamed their songs.

Later, it began blocking using audio "fingerprinting" technology supplied by partner Relatable, and the amount of material available through the service dropped from tens of millions of files to just a handful almost overnight. Napster closed its doors to the public not long afterwards.

Audible Magic's song-identifying technology is the product of a group of former Yamaha sound engineers, who originally created the software to help movie post-production studios search massive databases of sound effects such as footsteps or door slams. In the late 1990s, they joined forces with former Hewlett-Packard marketer Vance Ikezoye and his newly formed Audible Magic startup, and turned their attention to identifying digital media files such as songs.

The company's technology works by identifying "psycho-acoustical" properties--essentially the computer equivalent of listening to the song itself. That means that the identification procedure is flexible. A song might be compressed into a lower quality recording, or have a few seconds of silence taken out at the beginning or end, or be otherwise transformed, and the technology will still recognize it as the same song, the company says.

The identification technology has already won credibility, used by songwriters' and publishers' trade association SESAC to identify when songs are played on broadcast radio in order to collect royalties. Several CD pressing plants also use the technology to track what they're manufacturing and ensure that their customers aren't trying to create counterfeit discs.

But it has been the company's peer-to-peer-focused efforts that have now brought it squarely to the forefront of the copyright debates.

Audible Magic is offering two different versions of its technology, one focused on networks and one on file-swapping software itself.

For several years it has tested a network-based "appliance," which would sit inside an Internet service provider (ISP) or business network and monitor data traffic as it goes by. If it identifies a copyrighted song, the technology would stop the transfer in progress.

That's helped spur new interest in the technology, such as from the University of Rochester's Phelps, although announced customers are still few and far between.

Inside your software? The company's main demonstration for the last several weeks has been a version built into a piece of open-source Gnutella software. Similarly, it could be built into any other popular file-swapping package, company CEO Ikezoye said.

In that software-based version, the technology watches what songs are being downloaded, and when it has enough data to make a match--usually about a third to half of the file--it uses the Net connection to call Audible Magic's database. If it finds a match with a copyrighted song, it stops the download midstream.

Similarly, when files are put into a shared folder, the demonstration software calls up the Audible Magic database. If it finds a match, it prevents the song from being shared with other people on the network.

That second version of the software has not been tested on a large scale. While it appeared to function well in a single-user demonstration, implementing it on a widespread basis, particularly in software such as Kazaa or Morpheus where tens of millions of search requests a day are made, could have unforeseen consequences.

Moreover, for the filtering to work on a large scale, Ikezoye said that pressure--probably through legislation--would have to be put on file-swapping companies, which would be unlikely to voluntarily adopt his technology universally.

"This implementation clearly requires the cooperation one way or another of the peer-to-peer vendors," Ikezoye said.

Audible Magic's technology is far from perfect, even if it works as demonstrated. It's most critical weakness is likely to be encrypted files and encrypted networks, which its audio recognition software can't break through. Nor is it difficult to imagine hackers creating "cracked" versions of file-swapping software that have the song-recognition technology broken or stripped out, if legislators were to mandate its use.

Audible Magic is not the only company seeking to build filters for file swapping. Napster creator Shawn Fanning's new company Snocap is working on similar technology, with an aim toward giving record companies and music studios a way to make money from peer-to-peer networks.

But the file-swapping controversies are today as much rhetoric and politics as they are technology, and the last few weeks may have quietly seen a change in the file-swapping debates.

"I've achieved my objective, which is to say our technology works," Ikezoye said. "It is interesting that the question has shifted from 'Is this possible?' to 'How should this be deployed?'"

I believe that piracy should be solved by giving the goods for free and not by punishing with prison someone who downloaded a song; however, I also think that the artist and all the chain that allows the creation of these goods should be remunerated. If they are not, the quality and quantity of creation is very likely to be affected.

The matter is solvable, at least from a business point of view. This is one of the possibilities:

The producer of the copyrighted material should create two versions of the good that is produced, a high quality version and a lower quality version. For music and video it is fairly straightforward because it will be the same file but with a lower resolution for a movie and a lower sound quality for the audio. For the software and the games other mechanisms should be used. Note that the game and software should function properly and with full functionality but just with clear signs that this is the free version.

The distributors should publish the free versions on their web sites and encourage the users to download them and try them. The high quality paying goods would still be sold on the web site (the cheaper, the better).

Now, how does the whole creation production distribution chain recover the loss?

First, it is important to rationalize what the loss is. If the loss is compared to what the industry could have sold, it will be difficult to recover, but if the loss is compared to what they are actually selling then it is very likely that there will be no loss because the ones who will download the free versions are most likely to be the ones with pirated versions in a first place.

Second, the way that I believe could lead to interesting result is if the government creates a tax for the ISPs on the amount of downloads of their members.

The ISPs should not have difficulties to pass on the tax to their customers and the customers will not complain about an increase of their monthly fees if they can download free goods.

The tax then should be redistributed to the creation production distribution chain by the government.

Third, if the product is really interesting for the client, he will be encouraged by the free version to obtain and pay for a better one.

There are obviously some difficulties in the implementation of his model but I believe it is more realistic than tougher sentences on small scale piracy.

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